Latest news with #R859-million
The Citizen
30-06-2025
- Business
- The Citizen
Budget shortfall, not deficit – Modise slams DA claims
Tshwane's MMC for Finance Eugene Modise has reassured residents the city's financial stability and service delivery are top priorities. This assurance comes amid claims made by the DA of a growing budget deficit. Modise hit back at claims that the metro was spending beyond its means, asserting that the finances remained under control and its budget is funded. DA spokesperson for Finance Jacqui Uys expressed concern over what she described as a growing budget deficit under the current ANC/EFF/ActionSA coalition. Uys claimed that the deficit had grown by R859-million since the DA left office in September 2024. 'This, despite claims from Deputy Mayor Eugene Modise that the city's financial woes are over,' Uys said. She explained that in June 2024, the city adopted a funding plan to reduce a R3-billion deficit. 'By September 2024, our plan had boosted collections by R315-million. However, by the end of April 2025, that positive trend had reversed, with the city falling R859-million short of its collection target, a 19% deviation,' she said. Modise, however, clarified that the R859-million figure is not a deficit but rather a shortfall against the revenue collection target set in the city's funding plan. 'As of April 30, the city had collected R33.6-billion, just R859-million short of the R34.5-billion target, a variance of 2.5%,' he explained. He added that the shortfall is being managed through daily cash flow monitoring and is largely the result of customer non-payment. Despite the deviation from the funding plan, Modise emphasised that the city's actual revenue performance against the approved budget stands at nearly 100%, with a minimal variance of R26-million. He further noted that the National Treasury had independently confirmed that Tshwane's 2025/26 budget is funded. Responding to DA concerns over a decline in revenue collection since September 2024, Modise said the city's collection rate averaged 88%, with a current figure of 86% as of April. 'To improve collections, the city is enforcing its credit control and debt collection policies, and has rolled out campaigns such as the Festive Season Bonanza, Black Friday discounts, and the Incentive and Debt Relief Scheme to encourage customers to settle outstanding debts,' said Modise. On the reported R5.7-billion in outstanding debt, he confirmed that recovery efforts are ongoing under the Mayoral Charter on Revenue Enhancement and Financial Recovery, a framework adopted in June 2024 and still being implemented by the current administration. To curb spending and ensure financial stability, Modise said the city had adopted strict cost-containment measures. These include: – Postponing the filling of vacancies until July 1; – Reducing overtime to critical services only and halting Sunday overtime, except for emergencies; – Capping overtime to 40 hours per service; – Tighter management of acting allowances. 'These internal controls were approved during the February 2025 Technical Budget Steering session and are part of our strategy to manage expenditure responsibly,' Modise explained. He concluded by assuring residents and stakeholders that Tshwane remains financially stable and capable of meeting its obligations for the 2025/26 financial year. 'National Treasury has confirmed our budget is funded. We remain committed to improving our financial health and ensuring consistent service delivery,' he said. Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The Citizen
17-06-2025
- Business
- The Citizen
Metro's financial crisis is growing
The DA has raised alarms over the city's escalating deficit, which has now grown by a staggering R859-million. This is according to Jacqui Uys, the party's spokesperson on finance in the metro. This growing deficit is a stark contrast to the claims of the ANC's deputy mayor, Eugene Modise, who insisted at a city council budget approval meeting that the city's financial woes are over. Uys, however, argues that the situation is far from resolved and that the current government's handling of finances is putting the city's future at risk. The most immediate concern, according to Uys, is the rapid growth of the metro's deficit. 'The greatest risk for the city to continue to deliver quality services to residents is financial decline,' Uys explained. 'We are already seeing that the city is struggling to deliver key services like keeping the lights on, repairing potholes, maintaining streetlights, and fixing water leaks.' She said when the DA was in control of the city, a comprehensive financial recovery plan was adopted, targeting a R3-billion deficit. By the end of September 2024, the plan showed some success, improving the city's revenue collection by R315-million. 'Unfortunately, this positive momentum appears to have reversed under the current leadership, with the city's collection rate showing a decline of more than R850-million by April this year, a 19% shortfall from the target. Uys points out that the city's current administration is not prioritising debt collection in the way it should be. She believes this lack of focus on debt collection has compounded the city's financial troubles. As of March, Tshwane had outstanding debt amounting to R5.7-billion. Given these arrears, Uys is sceptical of the current administration's ability to maintain a funded budget for the upcoming 2025/26 financial year as promised by the ruling government. 'If the city is collecting under target, with R5.7-billion in unpaid debtors, they will not balance their books by June 30,' she said. 'This means they will start the new financial year with a deficit, and will not have enough income to cover their expenses.' The current administration, led by the ANC and its allies, has claimed that the city has a 'funded' budget for the upcoming financial year. However, Uys is not convinced. According to her, this notion of a funded budget is based on overly optimistic assumptions about the city's revenue collection. 'The city's ability to balance its books will be severely hampered if it continues to miss its revenue targets,' Uys argued. 'They are essentially trying to tax their way out of financial trouble, but residents are already burdened with high rates. Increasing taxes and introducing new levies, like the newly introduced waste levy, will make it harder for residents to pay their bills, which makes the 93% revenue collection target set for 2025/26 unrealistic.' While the new waste levy and increased income from a revised property valuation roll are expected to generate more revenue, Uys warned that this approach risks overburdening residents, who are already stretched thin by escalating costs. In an attempt to address the city's mounting debt, the coalition government has introduced debt relief schemes and incentive programmes. However, Uys is highly critical of these initiatives. 'The debt relief scheme was structured in a way that benefits the wealthy, who can afford to pay but choose not to,' she said. 'It did not benefit the average household, which may want to pay their bills but is unable to do so due to financial constraints.' One of the key measures that the DA introduced during its time in power was the Mayoral Charter for financial recovery, adopted in June 2024. Uys strongly believes that this plan is the key to the metro's financial health and has called on the current administration to implement it. The Deputy Mayor has been approached for comment, but none was received at the time of publication. Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading! Stay in the know. Download the Caxton Local News Network App Stay in the know. Download the Caxton Local News Network App here
